Long overlooked by Silicon Valley, Oakland may finally have its chance to benefit from the booming tech industry when Uber moves into the downtown Sears building, but residents greeted the news with a mixed reaction.

The San Francisco-based ride-hailing company last week said it purchased the deteriorating seven-story building for $123.5 million and planned to convert it into over 300,000 square feet of office space by 2017. The bottom floor would be leased to retailers. When the office opens, Uber expects 3,000 employees will work there, making it the largest company in the city.

While city officials welcomed the sale as an important move to revitalize the depressed downtown area, residents, who have watched real estate developers convert former auto shops and parking lots into expensive apartments and upscale bars, worry that tech companies and their employees may soon take over their city like they have San Francisco.

Curtis Forte, a 34-year old construction worker and lifelong Oakland resident, said he appreciated the transformation that was starting to happen but was concerned that existing residents would be left behind. “I know they’re not going to reach out to the people of the community when it comes time to build their company,” Forte said in an interview during an open-air concert at a park across the street from the Sears building.

At the same time, he said, he holds out hope that he is wrong. “I just don’t want the people of the community to be left out. People have been struggling here for so long.”

Remnants of the Sears logo are visible at 1955 Broadway, Oakland. Photo by Jennifer Glenfield.

Once a thriving department store owned by H.C. Capwell Company, Uber’s new building stands just blocks away from City Hall, surrounded by relatively new bars and restaurants.

For many years, the Sears building stood as a symbol of downtown Oakland’s struggle to attract new businesses and developments. During the years when Sears Corp. owned the building from 1996 to 2014, the store was surrounded mostly by vacant storefronts and parking lots. In 2014 Lane Partners, a commercial real estate investment firm, bought the failing department store building for $25 million and boarded up the windows and doors. They in turn sold the property to Uber. The latest announcement now puts it on the map as a sign of the transformation that is taking place.

In the past 11 years, a few tech companies such as music-streaming service Pandora and search engine Ask.com have made downtown Oakland its home, but Uber’s expansion plans are the largest yet–occupying more than three times the square footage of downtown office space than its fellow tech companies.

In a press conference with Uber last week, Oakland Mayor Libby Schaaf called the downtown area the city’s “hottest new center for urban innovation.”

Uber’s Oakland plan underscores the rapid rise of the five-year old company that has upended the taxi industry by connecting drivers-for-hire to customers through a smartphone app. In the previous six months Uber has more than doubled it’s workforce to 4,000. The company has also purchased 430,000 square feet of commercial real estate in San Francisco.

But with success has come controversy. Uber has been hit by criticism and embroiled in class-action lawsuits by its drivers, who claim that they should be considered full-time employees rather than independent contractors. Some Uber riders have also been the victim of crimes committed by their drivers, putting the spotlight on the company’s hiring and vetting policy and raising questions about corporate responsibility.

Such news concerns some members of the Oakland community. “Uber is the creator of a small number of good jobs for engineers or those in marketing or branding. They are much more a creator of many, many low-income, non-unionized, non-regulated jobs,” said Dawn Phillips, co-director of programs at Causa Justa, a nonprofit housing advocacy group that works with low-income immigrants and people of color. “That’s literally their business model.”

Hours after Uber Technologies Inc. announced purchase of the former Sears building, 1955 Broadway, Oakland, a passerby scribbled the news in permanent marker on a widow of the building facing Broadway. Photo by Jennifer Glenfield.

Phillips, an Oakland resident since 1995, also worries about the influx of more high-paid tech workers moving into the city, pointing out that the encroachment of “cash flush” tech companies into city centers has already driven up property values, forcing out many vulnerable long-time residents from their neighborhoods. Uber itself estimates that one in four employees will be living in the East Bay by the time the project is completed.

Will Scott, an Oakland resident who works for Alameda County, questioned how much the community would benefit from the jobs that are created as a result of the expansion. “It’s good for Oakland to bring in new blood, but I don’t want the citizens of Oakland to be shut out,” said Scott. “If we need to educate them, train them, then let’s do that. But let’s not push the residents of Oakland to the side just so we can bring in an extra buck.”

Lets look at this with some better context. 20% of Uber’s corp workforce already live in the East Bay. Uber sees that number reaching 25% when Uptown Station goes online. I don’t see how that 5% change (for the entire East Bay) is going to change Oakland. I know, what about a flood of new tech coming to Oakland? The commercial vacancy rate in Oakland is headed to less than 5%. That means there’s literally nowhere for new tech to substantially expand in Oakland. What about supplanting existing commercial tenants? Sure tech could start to supplant current businesses, but since most of their leases were signed after 2012 we’re looking at almost a decade before we could even possibly begin to see a wholesale switch from traditional business to tech. What about the non-profits being force out like they were in SF? The Great Recession was a goldmine for regional nonprofits who descended on Oakland and snapped up their very own buildings, so they’re not going anywhere! Even the ones that have recently moved to newly leased Oakland digs have ten years to plan for this. What about tech moving into new buildings? Only two commercial buildings are presently shovel-ready in Oakland and even those will take about two years to complete. So cool off everyone, Oakland’s not going to change over night. Just some additional food for thought. Oakland will directly see one time money of $1.8M from transfer tax. Each year $1.1M of their total property tax bill with go to the City of Oakland ($700k of that to OUSD). Employee spending at area businesses is estimated to be around $14M per year resulting in $1.2M in sales tax revenue. Just wanted to add some facts to the dialogue.

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